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It all started in Canada. And it started well. In 1971 Canada was the first country in the world to adopt multiculturalism as an official policy. By so doing, as the web site of the “Canadian Heritage” proudly asserts: “Canada affirmed the value and dignity of all Canadian citizens regardless of their racial or ethnic origins, their language, or their religious affiliation”. Multiculturalism was soon adopted as official policy by most member states of the European Union, with Britain taking a leading part in the growing movement. Indeed, multiculturalism rapidly became the vogue of the day across the world. Those sunny days are now gone, certainly in Europe. The French and the Germans are very doubtful of the wisdom of the approach, and Denmark and the Netherlands have already reversed their official policies. Even Britain is full of misgivings. What, then, is the problem?

The history of multiculturalism offers a telling example of how bad reasoning can tie people up in terrible knots of their own making. The importance of cultural freedom, central to the dignity of all people, must be distinguished from the celebration and championing of every form of cultural inheritance, irrespective of whether the people involved would choose those particular practices given the opportunity of critical scrutiny, and given an adequate knowledge of other options and of the choices that actually exist in the society in which they live. The demands of cultural freedom include, among other priorities, the task of resisting the automatic endorsement of past traditions, when people – not excluding young people – see reason for changing their ways of living.

In terms of human freedom, the merit of diversity must depend on precisely how it is brought about and sustained. If a young woman in a conservative immigrant family in Britain wants to go out with an English boy, her choice can hardly be faulted on grounds of multicultural freedom. In contrast, the attempt by her guardians to stop her doing this (a common enough occurrence) is hardly a multicultural move, since it wants to keep the cultures separate in (what can be called) a “plural monocultural” form. Yet it is the parents’ prohibition that seems to strike the most sympathetic chord with the dedicated “multiculturalists” today.

The history of multiculturalism in Britain is interesting to examine in this context. The positive phase of multicultural integration in Britain has been followed by a phase of separatism and confusion. Post-colonial Britain began wonderfully well in trying to integrate immigrant communities through nondiscriminatory treatment in healthcare, in social security and even in voting rights. The last was a contribution of the visionary policy of having a Commonwealth of Nations, itself a multicultural initiative with distinctly British leadership, which has made it possible, among other things, for all residents who are citizens of the Commonwealth (including almost the entire non-white immigrant population in Britain) to participate in UK elections. In contrast to the truly unequal history of immigrants in Germany, France and, indeed, in much of Europe, there is much to celebrate in the British achievement of giving legal immigrants their economic, social and political rights as rapidly as possible.

The blemishes, for example in policing, that existed and were clearly linked to Britain’s riots in 1981, particularly in Brixton and Birmingham, were addressed in a further visionary move led by Lord Scarman, who headed an inquiry into the riots and blamed “racial disadvantage that is a fact of British life”. Not all the concerns noted in the Scarman report have been eradicated (race can still make a difference, just as class and gender continue to do), but there has been persistent engagement, beginning well before “multiculturalism” became a popular slogan, with trying to achieve the treatment of all British people as equals, irrespective of “their racial or ethnic origins, their language, or their religious affiliation” (to quote that landmark Canadian phrase cited earlier).

The tragedy is that as the slogan of multiculturalism gained ground, the confusion regarding its demands also became increasingly influential. This is essentially a story of two confusions. The first is the confusion between cultural conservatism and cultural freedom. Being born in a particular community is not in itself an exercise of cultural liberty, since that is not an act of choice. In contrast, the decision to stay firmly within the traditional mode would be an exercise of freedom, if indeed the choice was made after considering other alternatives. In the same way, a decision to move away – by a little or a lot – from the past be­haviour pattern, made after reflection and ­reasoning, would also qualify as the exercise of multicultural freedom.

The second confusion lies in ignoring the fact that, while religion may be an important identity for people (especially if they have the freedom to choose between celebrating or rejecting inherited or attributed traditions), there are other affiliations and associations – political, social, economic – that people also have reason to value. Nor is religion all there is to culture. The Can­adian phrase explicitly refers to language in addition to religion, and it is worth remembering in that context that, although Bangladeshis in Britain are now officially categorised simply as “British Muslims”, the Bangladeshis fought for – and earned – independence not for a religious cause, but for linguistic freedom and secular politics.

British government leaders now frequently address each separated group of co-religionists as a “community” of its own, to be governed by its own customs (of course, with the additional demand that religious politics should take a “moderate” form). Religious spokesmen of immigrant groups apparently have a higher standing in British official reckoning – and greater access to the corridors of power – than ever before. New “faith schools” are being set up with government encouragement and support, paying greater attention to a rather mechanical religious “balance” as desired by the so-called “community leaders” than to the essentials of schooling and the training of children on how to reason freely.

Also, the partitioning role of separated schooling, which has done much to sow discord in Northern Ireland in the political distancing of Catholics and Protestants (by instilling a sense of divisive categorisation assigned at infancy) is now being allowed and, in effect, encouraged to sow alienation in another part of the British population.

What is needed now is not an abandonment of multiculturalism, nor the dumping of the goal of equality irrespective of “racial or ethnic origins, language, or religious affiliation”, but the overcoming of the two confusions that have done so much harm already. This is important both because freedom should count, but also for avoiding the French-style rebellion of the disadvantaged and the growing menace of violently separatist thoughts, in ascendancy in Britain, that sometimes spill into barbarously brutal deeds. It is important to recognise that the early success of multiculturalism in Britain has been linked with its attempt to integrate, not separate. The current focus on separatism is not a contribution to multicultural freedoms, but just the opposite.

The writer, who received the 1998 Nobel Prize for economics, is Lamont university professor at Harvard University and former Master of Trinity College, Cambridge; his latest book is Identity and Violence (Penguin/WW Norton)